GST Overhaul: A New Chapter for India's Automotive Sector
In a significant move, the GST Council has revamped India's Goods and Services Tax regime, optimizing slabs to 5% and 18%. This overhaul reduces tax rates on small cars and bikes, aiming to stimulate demand. EVs maintain a preferential rate, supporting India's vision for green mobility.
- Country:
- India
The GST Council's recent decision to restructure India's tax regime promises relief for small car and bike buyers, with tax rates set to drop dramatically. Effective from September 22, the reforms align with longstanding industry requests for tax rationalization, according to Mercedes-Benz India CEO Santosh Iyer.
Under the new structure, vehicles like petrol, LPG, and CNG models under 1,200 cc, will now fall under the 18% GST slab, a significant decrease from the current 28%. This change is seen as an impetus for the automotive industry, expected to boost consumption.
Tax adjustments also favor electric vehicle adoption, maintaining their rate at 5%—a nod towards fostering sustainable transport. The reshaped tax framework is anticipated to streamline the sector's overall competitiveness and accessibility, supporting both domestic growth and global competitiveness.
(With inputs from agencies.)
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